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Garcia named Comelec chairman

GEORGE Erwin M. Garcia answers questions during a press conference on April 27 when he was election commissioner. — PHILIPPINE STAR/KRIZ JOHN ROSALES

PRESIDENT Ferdinand R. Marcos, Jr. has named his former election lawyer, George Erwin M. Garcia, as chairman of the Commission on Elections (Comelec). 

“I hereby submit for confirmation of the Commission on Appointments (CA), the ad interim appointment of Mr. George Erwin M. Garcia to the position of chairman, Commission on Elections, for a term expiring on February 2, 2029,” Mr. Marcos said in an appointment letter dated July 22.  

Mr. Garcia briefly served as Comelec commissioner from March to May this year.  

His appointment, along with several other officials appointed by former President Rodrigo R. Duterte, was bypassed by the CA on June 1 in the absence of a quorum.  

Before his stint in Comelec, Mr. Garcia lawyered for Mr. Marcos in his 2016 vice-presidential protest that he eventually lost.  

He was also the lawyer of Senator Grace Poe-Llamanzares in a lawsuit that sought to disqualify her from the 2016 presidential race.  

Mr. Garcia earlier said that he would push for an overhaul of existing election laws to keep up with the changing times. 

He also said that he planned to lobby for a law that would give Comelec power to go after fake news peddlers during campaign periods.  

FIRE
Meanwhile, Comelec on Monday gave assurance that voter information and election data were unaffected by the fire that broke out in the Comelec’s information technology department office on Sunday evening.  

In a statement, acting Comelec Spokesperson John Rex C. Laudiangco said all election servers and data remained safe since they were stored in a secure location away from the fire. 

“Given the limited area directly affected by the fire, other digital and physical files, administrative operational or judicial are all safe, secure, intact and unaffected,” he said. “Back-up of such is intact and safe as well, kept as well at our secured vault.”  

Election results and data will also remain live on Comelec’s website. — John Victor D. Ordoñez 

Ramos honored for his accomplishments on economy, peace, diplomacy

OFFICIALGAZETTE.GOV.PH
OFFICIALGAZETTE.GOV.PH

TRIBUTES poured in for the late Philippine President Fidel V. Ramos, who passed away Sunday, with business groups and state agencies honoring his achievements for the country’s economy, good governance reforms, the peace process in the south, and foreign policies.

The business community recognized Mr. Ramos, who was also commonly referred to by his initials FVR, for initiating structural reforms and good governance programs during his presidential term from 1992 to 1998.

“His administration was distinguished by impressive reforms on energy, economic liberalization, infrastructure and social reform, among others, which fuelled an engine for national progress built on his twin themes of people empowerment and global competitiveness,” the Management Association of the Philippines (MAP) said in a statement.   

“His good governance program is unparalleled. He has undoubtedly served the country with the highest standards of professionalism, integrity and transparency,” it added.

MAP said Mr. Ramos’ “unifying leadership” and push for complete staff work “has become and should continue to be the benchmark for national and local governance.”

The Supreme Court said its members will remember Mr. Ramos as a proponent of justice and judicial reform.

“During his  presidency, he consistently pledged his support to the Judiciary’s campaign for modernization and judicial excellence,” it said in a statement. “His commitment to justice helped strengthen the Judiciary.”

President Ferdinand R. Marcos, Jr. has already declared a 10-day period of national mourning over the passing of Mr. Ramos.

In Congress, resolutions were adopted at both the Senate and House of Representatives expressing sympathy and mourning for FVR’s death while legislators issued statements recognizing his pivotal role in Philippine history.

Senate President Juan Miguel F. Zubiri said FVR will be remembered for his Philippines 2000 program, which envisioned the country as a newly industrialized nation by the turn of the century, and turning a nation that was then dubbed as the Sick Man of Asia into Asia’s Next Tiger Economy.

Senator Risa Hontiveros-Baraquel, for her part, said Mr. Ramos was one of the “most dogged navigators” of the Philippines’ “contested democracy.”

She said that Mr. Ramos made a strong foundation for political recovery and economic stability, “which reinvigorated a country emerging from the very dark shadow of the Martial Law dictatorship.”

Mr. Ramos helped topple the late dictator Ferdinand E. Marcos’ regime as one of his military generals.

“His experience as a military general and his innate charm set the blueprint for what Philippine leaders should be: tough when necessary, but with a caring heart for the common Filipino,” House Speaker Martin G. Romualdez said.

He was hailed as a hero by many Filipinos for leading a coup against the dictator and supporting his successor in 1986.

Ms. Hontiveros said Mr. Ramos’ “clear articulation of Philippines 2000 engaged many stakeholders, giving our country a chance to stand tall beside other Asian economies.”

Senate President Pro-Tempore Loren B. Legarda described him as an executive chief who promoted people empowerment and global competitiveness, saying that he “left a legacy that demonstrated resolute courage, excellent leadership and unwavering allegiance.”

“He led various economic reform initiatives which pushed for the deregulation of key industries and the liberalization of the economy and encouraged the privatization of public entities, to include the modernization of public infrastructure through an expanded Build-Operate-Transfer law,” she said. His policies and programs stabilized the country’s economy.

At the same time, Ms. Hontiveros noted that some of Mr. Ramos’ policies somehow widened inequality in the Philippines.

“The liberalization and deregulation of too many industries, while a boon for foreign investors then, started to widen inequality here at home,” she said.

Mr. Ramos’ market-driven policies are among the reasons why the promises of the “EDSA project” remain largely unfulfilled, the senator said.

“Ironically [it even enabled] the political comeback of the heir of the dictatorship,” she said. “It is now up to our generation to realize a more equitable distribution of wealth and opportunities, as Filipinos face inflation, poverty, hunger, and unemployment today.”

PEACE TALKS
Mr. Zubiri, who comes from the southern island of Mindanao, also credited the former military general for the signing of a peace agreement with the Moro National Liberation Front (MNLF) in 1996 and for bringing the Spratlys issue to the world’s attention.

Lanao Del Sur Rep. Zia A. Adiong, in a tweet, said Mr. Ramos’ pursuit of negotiations with both the MILF and the Moro National Liberation Front paved the way for “major developments in the area of peace process.”

“We enjoy what we have in the BARMM (Bangsamoro Autonomous Region in Muslim Mindanao) right now because of him. It all started with him,” Mr. Adiong said.

The Department of Foreign Affairs (DFA), meanwhile, said in a statement: “President Ramos was widely considered as a ‘foreign policy’ president who shaped the evolution of the DFA by instituting economic diplomacy and the protection of overseas Filipinos as pillars of Philippine foreign policy.

During his term, he focused on post-Cold War opportunities offered in multilateral and economic diplomacy, and raised the profile of the Philippines in the region and globally.

“His contributions to our foreign policy will continue to benefit future generations of Filipinos. The DFA community extends its support and prayers to the Ramos family at this difficult time,” Foreign Affairs Secretary Enrique A. Manalo said in a tweet on Monday.

Foreign nations have also expressed their sympathies, including the United States, Japan, France, Canada, Israel, New Zealand, Denmark, Australia, India, Taiwan, and the European Union. — Kyle Aristophere T. Atienza, Alyssa Nicole O. Tan, and Matthew Carl L. Montecillo

Bill declaring part of Benham Rise as protected area filed at the Senate 

OCEANA.ORG

A BILL declaring a portion of Benham Rise, locally known as the Philippine Rise, as protected area has been filed at the Senate.  

Senate Bill 591, filed by Senator Cynthia A. Villar, chair of the Senate Environment Committee, seeks to proclaim the part of Benham Bank within the Philippine’s exclusive economic zone (EEZ) as a Marine Resource Reserve under the National Integrated Protected Areas System.  

Passage of the law will institutionalize and provide adequate funds for the Philippine Rise Marine Resource Reserve (PMRR), which will also enhance the country’s sovereignty over its waters and resources.  

Ms. Villar said the proclamation of the portion of the Benham Rise as a marine protected area in 2018 was just an initial step towards fulfilling the requirements for a full-fledged protected area.  

The senator said the state of habitats and biodiversity in the area must be closely monitored as the PMRR is the first marine protected area in the Philippine EEZ where fishery operations are regular.  

Regular expeditions must be conducted to establish long-term trends in the ecological integrity and biodiversity of Benham Rise, she added.  

The Philippine Rise, located east of northern Philippines, is an area that has abundant marine species and untapped mineral resources and gas deposits.  

In 2009, the Philippines filed a partial claim with the United Nations Commission on the Limits of the Continental Shelf for Philippine Rise, which was approved three years after.  

Former President Rodrigo R. Duterte issued an executive order in 2017 that renamed Benham Rise to Philippine Rise. — Alyssa Nicole O. Tan 

PH, US enhance maritime defense through skills, knowledge exchange

US EMBASSY

THE PHILIPPINES and the United States recently concluded a weeklong exchange of skills and intelligence to enhance counter measures against maritime threats, according to a statement released by the US Embassy on Monday. 

“This exchange equipped NCWC (National Coast Watch Center) analysts with the necessary tools to independently conduct Counter Threat Network analytical activities that strengthen the Philippines’ efforts to protect its territorial waters and maritime rights,” Defense Threat Reduction Agency (DTRA) Partner Engagement Coordinator Dawood Luqman said.  

“It also aimed to assist the NCWC in acquiring relevant knowledge and skills to support joint maritime domain and counter threat network operations,” the embassy said. 

The exchange, which ended on July 25, included three days of analytical discussion and two days of tabletop exercise that allowed DTRA’s experts to expand their knowledge of specific regional maritime security challenges through interactions with the Philippine Coast Guard and NCWC.  

The DTRA, based in Virginia, has long been partners with the Philippine government. It was responsible for constructing the NCWC facility in Manila, Regional Coordination Centers in Cebu and Palawan, among others.  

Since 2012, the DTRA has donated more than $64 million or P3.5 billion to the NCWC for the acquisition of advanced equipment and training of personnel. — Alyssa Nicole O. Tan

Companies from India, Israel to join Davao agriculture expo in Sept. 

BW FILE PHOTO

THE EMBASSIES of India and Israel will bring delegations to the 24th Davao Agri-Trade Expo (DATE) next month, which will be highlighting innovations in the agricultural sector.    

Cherrylin B. Casuga, chair of DATE organized by the Davao City Chamber of Commerce and Industry, said the Israel Economic and Commercial Mission to the Philippines and the Embassy of India will be participating in the trade exhibit.   

Up to 10 companies from each country will be joining the hybrid event on Sept. 29-30. 

DATE 2022 will have the theme “Innovative Agribusiness: Achieving Productivity and Sustainability for Food Security,” and focus on aquaculture, livestock, poultry, hogs, high-value crops, and game fowl.  

“We will be featuring innovations, and solutions to address the challenges faced by the agribusiness sector, mostly climate change, biodiversity, biosecurity, and also to be resilient to challenges that we are encountering in agriculture,” Ms. Casuga said.  

This year’s DATE aims to encourage local agri entrepreneurs to adopt new farming techniques and technologies to increase farm productivity, ensure sustainability, and become more competitive in the global market.  

Among the exhibitors that have signed up are Amazon Manufacturing Corporation, Skov Ltd., Philippine Scale Inc., Filinvest Land Inc., Card Pear Marketing, Macondray Plastic Products Inc., Sowing and Reaping Agricultural and Poultry Supply, R.Dan and Co. Inc, and Big Dutchman.  

Apart from the trade exhibit, there will also be forums and networking activities. The physical events will be held at the SMX Convention Center at SM Lanang Premier. — Maya M. Padillo

Parañaque mayor calls for development of parks in every village as part of disaster management

THE MAYOR of Parañaque, one of the cities in capital region Metro Manila, has called for the development of public parks in each of the 16 barangays and open spaces in private villages as part of disaster management.   

Parañaque City Mayor Eric L. Olivarez, in a statement of Monday, said these areas would have an important role during disasters such as earthquakes.  

Mr. Olivarez made the call in the aftermath of the magnitude 7 tremor that hit northern Luzon on July 7, which was felt at various intensities in Metro Manila.  

“Like other countries in Asia, the Philippines is one of the world’s most disaster-prone countries. Our islands are regularly being hit by floods, typhoons, landslides, earthquakes, and droughts,” he said.   

For public areas, “It is necessary to provide open spaces that are easily accessible from all barangays as the first evacuation sites during and post disaster,” he said, assuring funding support.   

Of the 16 barangays, only six had built public parks in the last three decades, he said.  

The mayor also urged communities within private and gated subdivisions, which usually have park areas, to have more than one access point to facilitate evacuations.

Manalo to skip ASEAN meet after testing positive for COVID-19

FOREIGN Affairs Secretary Enrique A. Manalo has tested positive for COVID-19, he said in a tweet on Monday, which means he will have to skip the 55th Association of Southeast Asian Nations (ASEAN) Foreign Ministers’ Meeting in Phnom Penh, Cambodia this week.   

“This would have been my first ASEAN engagement in my capacity as Secretary for Foreign Affairs, so it is unfortunate that my absence happens at this important time,” he said.   

Foreign Affairs Undersecretary for Bilateral Relations and ASEAN Affairs Theresa P. Lazaro will represent the Philippines in the event.   

“I will concentrate on recovery so I can go back to working at DFA (Department of Foreign Affairs) as soon as possible, and I look forward to the next opportunity to meet with ASEAN colleagues and our dialogue partners,” Mr. Manalo said.  

During the meeting, the region’s foreign leaders will witness the signing of the instruments of accession to the Treaty of Amity and Cooperation in Southeast Asia by Denmark, Greece, the Netherlands, Oman, Qatar and the United Arab Emirates, according to a statement last week from Cambodia’s foreign ministry. — Alyssa Nicole O. Tan

House adopts national medium-term fiscal plan as guide for annual budget deliberation

HOUSE OF REPRESENTATIVES

THE HOUSE of Representatives on Monday adopted a resolution that supports the national medium-term fiscal framework (MTFF), which will be used as guide by lawmakers for the annual budget deliberations.   

House Concurrent Resolution 2 aims to consolidate the national government’s resources to achieve maximum benefits for the economy.   

“It is important that Congressional initiatives are aligned with the economic recovery programs of the National Government,” said Marikina Rep. Stella Luz A. Quimbo, vice-chair of the Appropriations committee, who sponsored the resolution.  

“I stand before this august chamber today to sponsor a resolution adopting the national government’s Medium Term Fiscal Framework or MTFF as anchor for the annual spending and financing plan of the national government and for Congress when preparing the annual budget,” Ms. Quimbo said in her sponsorship speech.  

Albay Rep. Jose Ma. Sarte Salceda, chair of the Ways and Means Committee and was also a sponsor of the resolution, said the MTFF is an international best practice.  

“Some of our best neighbors and comparators are already doing that. Indonesia, Thailand, and Korea have it in their statutes. Malaysia, Singapore, and Japan do it regularly in their budgets,” he said in a statement. — Matthew Carl L. Montecillo 

Road to Sipalay beaches

DPWH

THE DEPARTMENT of Public Works and Highways (DPWH) has finished paving a 3.5-kilometer coastal road that provides access to white sand beaches and other potential tourism destinations in Sipalay City in central Philippines.

Business empires dominate PBA

JC GELLIDON-UNSPLASH

Big Business won big time in the Philippine Basketball Association (PBA) last Wednesday. The flagship teams of business empires San Miguel Corp. (SMC) and Metro Pacific Investments Corp. (MPIC) eliminated their opponents from further competition in this year’s Philippine Cup Conference. They beat them in the same fashion their parent company meets competitors.

The San Miguel Beermen smashed Blackwater Bossing by the lopsided score of 123-93 and TNT Tropang Giga demolished Converge FiberXers by 21 points, 116-95. That reduced the quarterfinals of the conference to a battle between SMC and MPIC ball clubs.

The triumph of San Miguel and TNT can only be attributed to their overabundance of talent. Their powerhouse rosters were made possible by the huge budgets of the two ball clubs.

The Beermen include players who were top 10 draftees. Three of them were No. 1 overall, Jun Mar Fajardo in 2012, Moala Tautuaa in 2015, CJ Perez in 2019; Chris Ross was No. 3 in 2009, Marcio Lassiter No. 4 in 2011, Rodney Brondial No. 6 and Jericho Cruz No. 9 in 2014, and Vic Manuel No. 9 in 2012. Except for Fajardo, the players mentioned were drafted by other teams. San Miguel acquired them through trade. San Miguel’s right to pick No. 1 in 2012 was itself acquired through trade.

Among the TNT top 10 draftees are Kelly Williams, No. 1 in 2006, Troy Rosario No. 2 in 2015, Jason Castro No. 3 in 2008, Mikey Williams No. 4 in 2020, and Glenn Khobuntin No. 10 in 2015. Except for Castro, they were all drafted by other teams. The right to pick No. 3 in 2008 was acquired through trade.

Neither Ever Bilena, Inc., owner of the Blackwater team, or Converge ICT, owner of the Converge FiberExers, is a corporate giant that can assemble a powerhouse team similar to San Miguel Beer or TNT Tropang Giga.

Blackwater through the years drafted Juami Tiongson, Brian Heruela, Art Dela Cruz, Almond Vosotros, Mac Belo, Reymar Jose, Bobby Rey Parks, Rey Suerte, Maurice Shaw, and, this year, Brandon Ganuelas-Rosser. It traded its rights to pick first in 2015 to TNT which picked Tautuaa, and to pick third in 2021 to NLEX, which chose Calvin Oftana. If it had kept all its draftees and used its rights in 2015 and 2021, Blackwater Bossing could have given the Beermen a decent fight.

Highly regarded players who have donned the black and red jersey and who now play for other teams are Mac Belo, J.P. Erram, Brian Heruela, Dave Marcelo, Kyle Pascual, Aillen Maliksi, Don Trollano, Art dela Cruz, and Bobby Ray Parks. Seven of the former Elite/Bossing now play for Metro Pacific teams — Erram, Heruela, and Marcelo for TNT, Belo, Maliksi, and Pascual for Miracle, and Trollano for NLEX.

The practice of big budget teams acquiring top draft picks in exchange for several so-so players was severely criticized by Fred Uytengsu, owner of the Alaska Milk Aces ball club in 2017. Kia Picanto traded its rights to pick first to San Miguel for several players.

San Miguel used its right and picked Christian Standhardinger, who was the consensus No. 1 overall pick that year. In return, Kia got from San Miguel Ronald Tubid, Jay-R Reyes, both already nearing retirement at the time, and seldom used reserve Fil-Am Rashaw McCarthy.

Uytengsu said, “The purpose of the draft is to strengthen the weaker teams. However, what we have seen lately is these weaker teams end up selling their top draft picks because if you look at who is being traded in return, it clearly doesn’t make basketball sense for the weaker teams, unless there is other consideration.”

Another issue Uytengsu raised was league balance and salary cap compliance. “If you look at the composition of SMB and Ginebra, you will see they are stacked with first to third picks. Many of those players came to them from curious trades. It’s difficult to comprehend how a team can fit within the team salary cap, paying those players all at approved maximum PBA salaries while still maintaining a strong sixth through eighth players. I’ve done the math and it doesn’t work,” said Uytengsu.

He cited four-time MVP June Mar Fajardo, Arwind Santos, Chris Ross, Marcio Lassiter, and Alex Cabagnot for the Beermen and the likes of Greg Slaughter, Japeth Aguilar, Joe Devance, LA Tenorio, Scottie Thompson, and Kevin Ferrer for the Kings, making him wonder if both franchises don’t go over the ceiling as far as players’ salaries are concerned.

In 2019, Global Port/NorthPort traded its 2014 top draft pick to Ginebra San Miguel for Sol Mercado, Jervy Cruz, and Kevin Ferrer. Mercado is out of the PBA and Cruz has not been fielded this conference. In 2021, Terrafirma Dyip/Kia Picanto sent to San Miguel CJ Perez, No. 1 pick overall in 2018. Dyip got Russel Escoto, Gelo Alolino, and Matt Ganuelas Rosser.

The continued practice of weak teams selling their top draft picks to lavishly funded ball clubs must have so exasperated Uytengsu that he decided to leave the PBA fold for good by selling his Alaska Milk Aces franchise to Converge ICT.

I doubt if Dennis Anthony H. Uy, owner of the Converge FiberExers, is in a position or inclined to outbid the owners of the SMC and MPIC ball clubs for the best talent. In two years, emissaries from those two business empires will be talking to Converge’s prized recruits Justin Arana and Jeo Ambohot.

Billionaire Mikee Romero, owner of the NorthPort Batang Pier could not hold on to Stanley Pringle. The other Dennis A. (for Ang) Uy, owner of Super LPG Fuel Masters, has not manifested any intention or inclination to keep Mathew Wright, Phoenix’ first draft choice when it joined the league during the Commissioner’s Cup of 2016. Phoenix Petroleum Philippines, Inc. is one of the principal units of Udenna Corp., Uy’s business empire.

Anyway, the pricey players of SMC and MPIC showed their true worth last Sunday. Each empire scored one victory and one loss. Both games — Magnolia vs. NLEX and Meralco vs. Ginebra — went down to the wire. Magnolia and NLEX were tied at the end of the regulation period. Magnolia prevailed in the end. The second game was decided in the last few seconds when Stanley Pringle missed a perimeter jump shot that could have tied the game.

Both games were hard fought. It showed in the unusually high number of jump balls. There were hard fouls but not dirty. There were many double fouls, too. Both games were brilliantly coached. I am tempted to say that it took Luigi Trillo, a co-villager and former classmate of my son, to get the monkey off the back of Meralco.

The quality of officiating was high. A foul called against the driving Scottie Thompson of Ginebra was crucial. It could have decided the game in favor of Meralco because the shot was nullified and Scottie fouled out on that call in the dying seconds of the game. But the replay clearly showed Scottie pushing off the defender as he drove for the basket.

Both games were among the most exciting in years. My only disappointment was the lack of analysis in the Magnolia — NLEX game. Dominic Uy merely joined sportscaster Charlie Cuna in giving an account of the game. He was there to annotate. Andy Jao and Ryan Gregorio tell the viewer what play can be expected, why the offense is stifled, or what the defender should have done, or who can match better against so-and-so, etc. Quinito Henson, also my co-villager (so are Tim Cone and San Miguel Asst. Coach Jorge Gallent) and my former player in the AIM intramurals, does that too but he does it like after every other sequence.

The business conglomerates continue to wage their battle in court — the basketball court. Magnolia will go up against TNT and Meralco against San Miguel beginning tomorrow.

 

Oscar P. Lagman, Jr. is a retired corporate executive, business consultant, and management professor. He has been a politicized citizen since his college days in the late 1950s.

Outsourcing in times of pandemic

MATT REAMES-UNSPLASH

I was seated beside a senior executive of a large BPO (business process outsourcing) in the country in the first face-to-face general membership meeting of MAP — Management Association of the Philippines — and we got to talk about the developments in the BPO industry in light of the pandemic. From our conversation, I gleaned three very interesting pieces of information.

Firstly, the outsourcing business increased and even accelerated during the pandemic; secondly, the employees and even applicants gained greater power and influence, making this an employees’ market; and, finally, as a spawn of the second item, the birth of “direct hires” employees.

The pandemic has forced many governments to impose lockdowns. Since they are continuing despite the lockdowns, businesses have to adopt work-from-home (WFH) models (in different degrees), mainly copying from what outsourcing has been doing for many years. Since everyone is working from home, everyone has been cooperating and has been making the WFH set-up work.

Many companies realized that WFH equates to outsourcing. And, outsourcing or WFH, in a way, is just a matter of distance. Outsourcing to the Philippines is farther away but essentially still a WFH. The Philippines, having established itself as an outsourcing haven, has taken many new clients. The WFH in the US became WFH in the Philippines, but cheaper.

While this is mainly good news for the local outsourcing industry, it has inadvertently led to issues of personnel and staffing. The Philippines has imposed several recurring lockdowns of varying degrees. Thus, many workers in the outsourcing industry have to do WFH as well. And mostly, these workers found WFH to be convenient, not physically draining, and easier. And many of them do not want to report back to the office but rather continue under a WFH set-up.

This desire of the workers runs counter to the desire of some clients and some government agencies, like the FIRB — Fiscal Incentives Review Board. Some clients have requirements that the outsourcing provider has to house the workers in an office.

Accordingly, the outsourcing provider has to open up the office or, in some cases, has to even open a new facility.

On the other hand, FIRB, in its desire to help the government stimulate the economy, has mandated that all PEZA-registered companies should follow a 70% (onsite) — 30% (WFH) set-up starting April 1, 2022. (Note: The Philippine Economic Zone Authority, or PEZA, I was told, was more inclined to continue the 90% WFH and 10% onsite set-up, which was adopted at the height of the pandemic.) Otherwise, these companies would lose their tax privileges and incentives.

Unfortunately, many providers have been unable to comply with this mandate as employees would rather resign than be forced to report onsite. And, providers also found that new applicants have WFH as one of their criteria for accepting work.

Consequently, according to the executive I talked to, the industry has a shortage of workers of 10% to 15%. In terms of numbers, this translates to about 100,000 to 150,000 workers, considering that PEZA estimated that those employed in the outsourcing industry as of 2021 to be about 1 million.

So, where are the workers? And why are they so bold as to resign (if already employed) or refuse the offer of employment (if still applying)?

It turns out that many young people are now working directly for companies abroad without the umbrella of a corporate entity. The outsourcing industry calls this arrangement — “virtual assistants” — primarily “direct hires” by companies abroad. Many of our young workers have adopted and accepted this work arrangement since they remain to be doing WFH and, moreover, they get significant increases in salaries compared to what they were getting while employed in local companies.

In some instances, these “direct hires” are even provided computers and related tools of the trade.

The WFH and the outsourcing practices have been adopted by the global business community for some time, primarily due to advances in technology and the agility of management. The pandemic has just accelerated these practices and made their adoption more widespread and easier.

The companies have adjusted, the employees have adjusted; but unfortunately, for most parts, the government/regulatory agencies are lagging far behind.

Looking at the actions of FIRB and other regulatory agencies, they seem to be missing critical points of these issues and are not attuned to the developments. For example, with the 70% — 30% mandate, some PEZA-registered companies are looking at foregoing their tax privileges and incentives just so they can keep their people.

Moreover, there seems to be a lack of action on the issue of “direct hires.” For me, more than the issue of the government losing taxes on revenues (and even payroll taxes), contributions to the Social Security System (SSS) and to health insurance (PhilHealth), the government should look after the general welfare of the “direct hires” — making sure that they are not abused nor short-changed in the end.

These issues of outsourcing and the new “trend” of “virtual assistants”/“direct hires” are surely not unique to the Philippine situation. It is likely being done in other outsourcing countries, like India, Brazil, and Poland.

Also, there might be new trends coming. The government should work hand in hand with the outsourcing industry in acting on and resolving these issues. There should be more creative solutions as the outsourcing industry continues to flourish even in the pandemic.

The article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines or MAP.

 

Jessie C. Carpio is a member of the MAP ESG Committee. He recently retired as partner of P&A Grant Thornton where he took on various leadership roles, such as head of Audit and Assurance Division, president of its outsourcing division, and International Liaison director.

map@map.org.ph

jccarpio627@gmail.com

The Post-SONA Economic Briefing; FVR’s economy

There were a number of important economic events that occurred last week, I will discuss four of them here.

FIRST SONA OF PFMJ
Last Monday, July 25, President Ferdinand Marcos, Jr. (PFMJ) delivered his first State of the Nation Address (SONA). It was a 3S — sane, statesman, sensible — address by a head of state. No cursing, no threats like “I will expropriate your business” that we heard in the SONAs of the previous administration.

Instead, the opening statements were all about the economy: “sound fiscal management… Tax administration reforms… spending efficiency… Productivity-enhancing investments… Ecozones supported… tax system adjusted to the digital economy… ease of paying taxes.”

“GDP growth targets 6.5 to 7.5% in 2022, 6.5 to 8% in 2023-2028… 9% or single-digit poverty rate by 2028. Three percent deficit to GDP ratio by 2028. Less than 60% debt-to-GDP ratio by 2025. At least $4,256 income (GNI) per capita and the attainment of upper middle-income status by 2024… objectives of this Medium-Term Fiscal Framework (MTFF) being submitted to Congress.”

For me this indicates one thing: the economy, not politics and populist pandering is primary on PFMJ’s mind. Which implies that if those economic goals contradict with politics and populist lobbying, the former will prevail over the latter. Good start, Mr. President.

POST-SONA ECONOMIC BRIEFING
The next day, July 26, there was a big event, the Post-SONA Economic Briefing at the Philippine International Convention Center (PICC). I was invited and I attended it. There were three panel discussions: Economic, Infrastructure, and Social Sectors, and these provided more details that were not elaborated on in the SONA.

In a panel by the economic team, all five heads came and spoke — Finance Secretary Benjamin Diokno, NEDA (National Economic and Development Authority) Secretary Arsenio Balisacan, Trade and Industry Secretary Alfredo Pascual, Budget and Management Secretary Amenah Pangandaman, Central Bank Governor Felipe Medalla.

In a panel by the infrastructure team, speakers were Public Works and Highways Secretary Manuel Bonoan, Information and Communication Technology Secretary Ivan John Uy, Tourism Secretary Ma. Esperanza Christina Garcia Frasco, Energy Secretary Raphael Lotilla (by phone) and Energy Director Mario Marasigan, plus Transportation Undersecretary Cesar Bermejo Chavez and Agriculture Assistant Secretary Arnel de Mesa.

And in the Social or Human Development team, the speakers were Vice-President and Education Secretary Sara Duterte, Social Welfare and Development Secretary Erwin Tulfo, Labor Secretary Bienvenido Laguesma, Environment and Natural Resources Secretary Maria Antonia Yulo Loyzaga, Migrant Workers Secretary Susan Ople, and Health Officer-in-Charge Maria Rosario Vergeire. Program hosts and panel Moderators were Budget and Management Undersecretary Margaux Salcedo and Central Bank Managing Director Antonio Joselito Lambino II.

A total of 12 Secretaries including VP Sara plus the Central Bank Governor spoke. Plus undersecretaries of some departments. It was a huge event and many corporate leaders, other government officials, and practically all media networks were there.

In a presentation for the Economic team, Finance Secretary Diokno showed the Philippines’ GDP growth trend from 2015 to 2021 and the projections until 2028, and net foreign direct investments (FDI) inflows from 2015 to 2021, extended to January-April 2022. There is a rising trend — good.

To further situate the Philippines growth trends, I created this table extending the period from 2005 to 2021 and covered five other major ASEAN countries. Data came from the International Monetary Fund’s (IMF) World Economic Outlook (WEO), and UN Conference on Trade and Development’s (UNCTAD) World Investment Report (WIR) 2022.

Pre-pandemic — 2015-2019 — the Philippines was the second fastest growing economy in the ASEAN-6 next to Vietnam. And when it came to FDI (foreign direct investments) inflows, the Philippines had the lowest in the ASEAN-6 in 2005-2009, but by 2015-2019 the Philippines had caught up with Malaysia and Thailand (Table 1).

These are good trends — except for the deep contraction of 2020, -9.6%, due to the severe and business-killing lockdown imposed by the previous administration.

Budget and Management Secretary Pangandaman made a good distinction and division of labor between national and local governments. Big infrastructure projects by the national government, support and smaller infra by the local governments. And the agency’s “rightsizing” program will complement this new division of labor, not only in infrastructure but also in the social sectors. Some agencies will shrink if they are not abolished, other agencies can expand.

Economics Secretary Balisacan briefly discussed the Philippine Development Plan (PDP) 2023-2028 that includes the Eight-Point Agenda, among which are: protect households’ purchasing power, sound macroeconomic fundamentals, ensure a level playing field, and uphold public order.

Central Bank Governor Medalla signaled an additional mild interest rate hike this August when the Monetary Board meets, while ruling out an additional “off-cycle” big rate hike.

In a presentation for the Infrastructure team, Public Works and Highways Secretary Bonoan showed a map of the Luzon Spine Expressway Network (LSEN) program, a total of 1,213 kilometers of completed, under construction, and proposed toll roads that will reduce travel from the Ilocos to Bicol regions from 20 to just nine hours. Then there are the Inter-island Linkage/Mega Bridge program, including the Bataan-Cavite bridge (32.2 kms) and Panay-Guimaras-Negros bridges (32.5 kms). And the various seaport, airport, and railway projects. Beautiful grand plans that will need fast and sustained economic growth to finance and materialize them.

Energy Secretary Lotilla emphasized the need to have more power plants, a bigger power supply base, and wider or more diversified energy sources. Such energy diversification will include nuclear power and new natural gas via investment incentives to the upstream sector. I support these, plus the additional target to have 100% electrification of households nationwide including far-flung barangays.

The dirtiest and most dangerous power sources are candles and household gensets, not coal and nuclear power plants. A friend based in Calapan, Oriental Mindoro told me that until now they still have blackouts of three to five hours a day, sometimes two times a day — horrible. More candles mean more fires and more destruction of property if not deaths of people. More gensets mean more air and noise pollution.

DECELERATING GROWTH OF THE WEST
Last week, the GDP growth for the second quarter (Q2) of 2022 were released by a number of industrial and Asian countries. I averaged the Q1 and Q2 growths into first half (H1) and commented whether H1 2022 was a strong (S), weak (W), or very weak (VW) recovery in Table 2. I say VW when H1 2022 growth is low on the already low recovery in H1 2022.

RIP, FVR
Last Sunday, former President Fidel V. Ramos died at the age of 94. I went back to the macroeconomic numbers during his presidency (July 1992-June 1998), with the last three years of the Cory Aquino administration (1990-1992) as the base period, and compared it with five other major economies of the ASEAN-6 (Table 3).

The Mt. Pinatubo eruption, the big earthquake in Luzon, and major blackouts all occurred in 1990-1991, so growth was adversely affected and supply chains were tangled, so inflation was high. President Ramos was able to make a quick economic recovery in his first three years and reduce the inflation rate. And he sustained the momentum when the Asian Financial Crisis occurred in 1997-1998 — the Philippines grew 3.5% in 1996-1998 while Indonesia and Thailand experienced contractions.

You did well as President of the Philippines, Sir. Peaceful journey.

 

Bienvenido S. Oplas, Jr. is the president of Minimal Government Thinkers.

minimalgovernment@gmail.com

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